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| *Ostroff, Fair and Company>>>United Kingdom Taxes |
If i earn 拢200 on a buy to let mortgage each month, do i need to pay tax on it ? |
What tax releif do i get if i am spending money on the maintainence of the property Go to the Revenue website, and search for leaflet IR150. its written in plain English and is fairly intelligible. It sets out which expenses are deductible or not - but broadly, capital expenses are not deductible (ie anything that adds to the value of the property or is considered an improvement), whereas 麓revenue麓expensse are allowable (ie maintaining the property at its current level). Source(s): www.hmrc.gov.uk I will certainly count towards your individual tax allowance and whilst you may not have to pay tax on it you will need to complete a self assessment tax form to declare the income. Do a search under 'advice for landlords' and a few helpful websites come up including Landlord Association. On any buy to let mortgage, only the interest part of the monthly payment can be deducted as an expense. For example 拢1000.00 a month mortgage, rent income 拢1000.00 does not mean that one cancels the other out. Out out of that 拢1000.00 about 拢750.00 will be interest, so already you are showing a profit 拢250.00, you can take off any valid expenses. Show this on the self assessment tax form either as a profit or a loss and this will then get adjusted aginst a tax code for the following year. If you have lost money, then they will put your allowance up. Hope this helps Sam my brain there are allowable costs against rental income - the inland revenue will be able to provide guidance. Remember also the capital gains tax when you ultimately sell the property. |
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